Fun With Rebates

Looking for news you can trust?Subscribe to our free newsletters.

FUN WITH REBATES….Felix Salmon thinks the Obama economic team is showing its behavioral economics roots. Why? Because their proposed tax rebate will come a little bit at a time by reducing tax withholding in paychecks:

The point of a stimulus package, of course, is to boost spending. And hiding a tax rebate in slightly higher take-home paychecks seems like a good way of doing that: even people who save a certain amount of money every month still tend to spend the rest.

I guess that’s true. Send me a $1,000 check, and there’s a good chance I’ll use it to pay down my credit card. Reduce my withholding by $20 a week for 50 weeks, though, and I’ll probably just blow it on beer and fritos. And that’s consumption, my friends!

Fact:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn’t fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation so we can keep on doing the type of journalism that 2018 demands.